A typical “cuppa” at Seattle Coffee costs about eight rands (R8), or just over one US dollar. That’s a hefty cost for the average South African, especially given that it’s a “take-away” offering (you take your coffee to your table yourself). South Africans are used to paying half that amount for lower quality take-away coffee from fast food outlets. In restaurants, coffee brewed in a machine is still referred to as “filter coffee” and comes at a premium price. So, considering that a tall latte at Seattle Coffee can run up to R15 (US$ 2), Seattle Coffee profits well from the novelty factor. Yet, upon purchasing a cup of coffee, South African customers insist on sitting down and enjoying it.

Maybe it’s those domed lids. South Africans just don’t get them. Overseas, Starbucks benefits heavily from the “to go” factor, something that is not a draw for South Africans. It’s just not an “on the go culture.” It’s a “take a break culture.” It’s a culture that, after all, has long ago worked a tea break into the weekday. Roman Cylkowski, of Johannesburg-based Blitzforce Marketing, explains it this way: Because most South Africans work outside of the inner cities—mainly in offices or industrial parks—there seems to be a tendency for them to look for an attractive environment in which to drink coffee, “rather than grabbing a cup of their favorite brew and taking this up to their office.”

Vida e Caffé works on essentially the same price points but is a stripped down version of Seattle Coffee and attracts a younger, hipper, more mobile crowd. While a customer at Seattle Coffee is busy surfing the web on a notebook computer, the Vida customer is sitting on the street with sunglasses on, sending a text message via mobile phone. Ironically, Vida e Caffé shops are downright uncomfortable. Their hard plastic benches and stools are no match for the deep leather chairs and wooden seats over at Seattle Coffee. When in Vida’s minimalist setting, one feels on display, which also might be the point.

Success Attracts Overseas Brand Names… and Competition

The success of these local stores has attracted the likes of Gloria Jean’s Coffees, an American franchise that found success in Australia. The company’s PR consultant, Dionne Domyan in Johannesburg, notes that not only is Gloria Jean’s ten times the size of Starbucks in Australia (400 stores versus a meager 36), it also has won “every award going in the Australian business market.” With 800 stores currently worldwide and another 300 planned, Gloria Jean’s looks to be the first outsider in South Africa set to offer heavy competition to the locals. They claim to have a target of thirty stores within the next twelve months, which, if they reach it, would make Gloria Jean’s easily the fastest growing chain in the country—not least because they bring so much offshore finance to the equation: an initial injection of R27 million (US$ 3.8 million) followed by another R45 million (US$ 6.4 million).

Here we have another American-sounding brand that seems perfectly catered to South African markets. It also offers a South African based “coffee university” to train local baristas. Vida must be watching with some unease as this juggernaut arrives and opens up stores three times faster than it has. “In terms of our target market,” says Dionne, “definitely Vida is our top competitor.”

Ron Irwin is a brand consultant and writer based in Cape Town, South Africa. He has lectured extensively on brand management at the University of Cape Town School of Management Studies and to local companies. Find him on the web at ronaldirwin.co.za.